A recent ruling made by the Eleventh Judicial Circuit of Florida is getting significant attention. The decision to enforce an ex-party order freezing assets represents the first worldwide asset-freeze in a US court.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
A recent ruling made by the Eleventh Judicial Circuit of Florida is getting significant attention. The decision to enforce an ex-party order freezing assets represents the first worldwide asset-freeze in a US court.
Burford Capital explains that in Gorsoan Ltd v Bullock 2020, the court sided with the plaintiff, targeting a $7 million condo. The ruling is good news for those hoping Florida courts will allow them to pursue foreign debtors. It also represents a change in the state’s position on freezing assets.
In the US, courts follow a principle that creditors and debtors share equal rights under the law. Asset-freeze orders are seen as contrary to this and have therefore rarely been used in the US. A 1999 case, Grupo Mexicano de Desarollo SA v Alliance Bond Fund Inc 1999, saw an asset-freeze order overturned by SCOTUS. The Supreme Court held that a freeze order would interfere with the defendant’s right to use their own property, shifting the balance of power to the plaintiff. Typically, US courts follow SCOTUS’s example on this topic—until now.
The impact of the ruling in Gorsoan v Bullock is significant. With regard to the ruling, the court concluded that according to public policy, it could enforce an order issued by an impartial court—even a foreign court—so long as it had appropriate jurisdiction.
We can’t know yet whether other states will follow Florida’s example, but this is definitely a development worth keeping an eye on.
